Dynamic APY for ATOM

Dynamic APY Adjustment Proposal for Cosmos Network Abstract: This proposal aims to introduce a dynamic Annual Percentage Yield (APY) adjustment mechanism within the Cosmos network. The proposed mechanism adjusts the APY based on the staking percentage and the price range of the native cryptocurrency. By implementing this mechanism, we aim to incentivize participation, align rewards with market conditions, and maintain a healthy balance between network security and economic incentives. Motivation: • Incentivizing participation: By adjusting the APY based on market conditions, we can provide appropriate rewards to different types of investors during bull and bear market cycles. • Aligning rewards with market conditions: A dynamic APY allows us to offer higher rewards during bear markets, thereby supporting long-term investors and providing a cushion against potential losses. • Balancing network security and economic incentives: By considering the staking percentage, we can ensure that the network remains secure while encouraging active participation based on the economic health of the network. Proposal Details: • Price range-based adjustment: Define specific price…

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should wait till the tokenomic revamp ?

So as price increases, more people will be incentivized to unstake? Seems it would make the network less secure without any real benefit. Plus, many whales already sell off their staking rewards daily. Token might end up printing faster and dumping harder, creating a snowball effect in an unintended way.

I understand that limits can be put in place, but this seems like an unnecessary undertaking.

I see your point. But the lock up period is for 21 days so i doubt there would be a huge sell off. Im sure people have some ATOM unstaked just in case of price appreciation. Have a stash for taking profit and some for holding long term with staking. Without this proposal people would still sell with major price appreciation. You have to understand some people are crypto enthusiasts, some are simply investors. I feel this space sometimes wanna live in Utopia and not accept the reality. With high APY this hurts price appreciation, hence whales (and validators) selling off rewards. Lower that APY with price appreciation and the selling pressure wont be as bad. People will continue to stake, even if the APY drops a few percentage points per price range/bracket. Cosmos has some of the highest APY of any blockchain. Gradually lowering the APY wont hurt the chain. Most validators will be against this because some of them have huge stakes making a decent income off staking. Whales could be validators as well. There needs to be a healthy balance with validators and investors. Cosmos has great tech. With mass adoption Validators will be rewarded through staking and price…

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Of course. May not need this proposal.

I am opposed to changes that make it necessary for the hub to be aware of the price of atom. That kind of thing gets really complicated.

I see your point, but they need some kind of deflationary mechanism or a max supply. The unlimited supply will hurt Cosmos in the long run.